Correlation Between HUMANA and Credit Suisse

Can any of the company-specific risk be diversified away by investing in both HUMANA and Credit Suisse at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining HUMANA and Credit Suisse into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HUMANA INC and Credit Suisse Multialternative, you can compare the effects of market volatilities on HUMANA and Credit Suisse and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in HUMANA with a short position of Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Credit Suisse.

Diversification Opportunities for HUMANA and Credit Suisse

0.17

Correlation Coefficient

HUMANA  Credit Suisse

Average diversification

The 3 months correlation between HUMANA and Credit is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Credit Suisse Multialternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse Multia and HUMANA is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on HUMANA INC are associated (or correlated) with Credit Suisse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Suisse Multia has no effect on the direction of HUMANA i.e., HUMANA and Credit Suisse go up and down completely randomly.

Pair Corralation between HUMANA and Credit Suisse

Assuming the 90 days trading horizon HUMANA INC is expected to generate 0.46 times more return on investment than Credit Suisse. However, HUMANA INC is 2.18 times less risky than Credit Suisse. It trades about 0.12 of its potential returns per unit of risk. Credit Suisse Multialternative is currently generating about -0.21 per unit of risk. If you would invest  8,197  in HUMANA INC on October 9, 2024 and sell it today you would earn a total of  247.00  from holding HUMANA INC or generate 3.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

HUMANA INC  vs.  Credit Suisse Multialternative

HUMANA INC

Risk-Adjusted Performance

4 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HUMANA INC are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, HUMANA is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Credit Suisse Multia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Credit Suisse Multialternative has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with HUMANA and Credit Suisse

The main advantage of trading using opposite HUMANA and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Credit Suisse can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Credit Suisse will offset losses from the drop in Credit Suisse's long position.

The idea behind HUMANA INC and Credit Suisse Multialternative pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Transaction History module to view history of all your transactions and understand their impact on performance.